1. Product and Services Concepts
Chapter 8
Product and Services Concepts
Prepared by
Deborah Baker
Texas Christian University
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Chapter 8

2. Chapter 8 Objectives 1. Define the term “product.”
Product and Services Concepts
Chapter 8 Objectives
1. Define the term “product.”
2. Classify consumer products.
3. Discuss the importance of services to
the economy.
4. Identify the differences between services and goods.
(continued)
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Chapter 8

3. Product and Services Concepts
Chapter 8 Objectives
5. Explain why services marketing is important to manufacturers.
6. Define the terms “product item,” “product line,” and “product mix.”
7. Describe marketing uses of branding.
(continued)
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Chapter 8

4. Product and Services Concepts
Chapter 8 Objectives
8. Describe marketing uses of packaging and labeling.
9. Describe how and why product warranties are important marketing tools.
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5. Product is the “heart” of Marketing
What is a Product?
Product is the “heart” of Marketing
Mix
Price
Promotion
Place (Distribution)
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6. Types of Consumer Products
©2000 South-Western College Publishing
Unsought
Products
Specialty
Shopping
Convenience
Consumer
Business
PRODUCTS
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7. Types of Consumer Products
Specialty
Products
Convenience
Shopping
Unsought
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©2000 South-Western College Publishing

8. The Importance of Services to the U.S.
More than eight in ten workers are in
service sector
Services are 74% of U.S. GDP
Services produced a $55.7 billion balance-of-trade surplus (1993)
Service occupations will be responsible for all job growth through 2005
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©2000 South-Western College Publishing

9. How Services Differ from Goods
Intangibility
Characteristics
That
Distinguish
Services
Inseparability
Heterogeneity
Perishability
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10. Services Marketing in Manufacturing
Services are a major factor for success of manufacturing firms
Services provide a strong competitive advantage when products are similar
Services are often bundled into purchases of manufactured goods
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11. Efficient Sales and Distribution Advertising Economies
Product Lines
Equivalent Quality
Efficient Sales and Distribution
Standardized
Components
Package Uniformity
Advertising Economies
Why Form Product Lines?
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12. Width of the product mix Depth of the product lines
Gillette’s Product Lines and Mix
Width of the product mix
Blades and Writing
razors Toiletries instruments Lighters
Mach 3 Series Paper Mate Cricket
Sensor Adorn Flair S.T. Dupont
Trac II Toni Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus
Depth of the product lines
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13. Product Lines and Product Mix
Product Mix Width
Spreads risk across multiple lines
Capitalizes on established reputations
Attracts buyers with different preferences
Capitalizes on economies of scale
Increases sales/profits by further market segmentation
Evens out seasonal sales patterns
Product Line Depth
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14. Adjustments to Products
Adjustments to Product Items, Lines, and Mixes
Product Modification
Product Line
Extension or Contraction
Product Repositioning
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©2000 South-Western College Publishing

15. Types of Product Modifications Functional Modification
Quality Modification
Types of Product Modifications
Functional Modification
Style Modification
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©2000 South-Western College Publishing

16. Product Repositioning
Why reposition established brands?
Changing Demographics
Changes in Social Environment
Declining Sales
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17. Symptoms of Product Line Overextension
Product Line Contraction
Symptoms of Product Line Overextension
Some products are not contributing to profit because of low sales or cannibalization
Manufacturing or marketing resources are disproportionately allocated to slow-moving products
Items in the line have become obsolete because of new product entries
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18. Branding is the main tool used to distinguish products
Benefits of Branding
Purposes of Branding
Branding is the main tool
used to distinguish products
from competition
Product Identification
Repeat Sales
New-Product Sales
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19. Brand Names Good brand names have several of these features…
Product and Services Concepts
Brand Names
Good brand names have several of these features…
Is easy to pronounce
Is easy to recognize and remember
Is short and distinctive
Describes the product and product use
Describes product benefits
Has a positive connotation
Reinforces the desired product image
Is legally protectable in home and foreign markets
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20. Branding Strategies Brand No Brand Manufacturer’s Brand Private Brand
Product and Services Concepts
Branding Strategies
Brand
No Brand
Manufacturer’s Brand
Private Brand
Individual Brand
Family Brand
Combi- nation
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21. Complementary Branding
Cobranding
Types of Cobranding
Ingredient Branding
Complementary Branding
Cooperative Branding
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©2000 South-Western College Publishing

22. TM Trademarks A Trademark is the exclusive right to use a brand
Product and Services Concepts
Trademarks
A Trademark is the
exclusive right to use a brand
Many parts of a brand and associated symbols qualify for trademark protection
The mark has to be continuously protected
Rights continue for as long as it is used TM
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23. Facilitate Storage, Use,
Packaging
Contain and Protect
Functions of
Packaging
Promote
Facilitate Storage, Use,
and Convenience
Facilitate Recycling
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24. Labeling Forms of Labeling Focuses on promotional theme
Persuasive
Focuses on promotional theme
Information is secondary
Informational
Helps make proper selections
Lowers cognitive dissonance
Includes use/care
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25. Product Warranties Warranties Express Warranty Implied Warranty
Written Guarantee
Warranties
Implied Warranty
Unwritten Guarantee
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